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On Framing The Argument: What “Tax Cuts for the Rich”?

The terminology used to frame arguments can have crucial impacts on how those arguments play out in the public domain. For example, in the post-Roe v Wade era, “pro-life” has been a particularly masterful public marketing frame for one set of beliefs surrounding a provocative topic, in that it forced those in opposition to frame their own soundbite arguments from problematic “pro-death” or “anti-life” standpoints, or to shift the frame of argument away from “life” completely, focusing instead on “choice” as the issue in play. Recently, “Ground Zero Mosque” similarly came to be used as powerful short-hand for a complicated issue. “Oh, sure, freedom of religion is important, but, wow, a mosque at Ground Zero?? How can anyone support that?!?”

In these and so many other cases, peoples’ understanding of the root issues can be compromised by unthinking dependence on buzzwords, and passive acquiescence to the easy talking points that our establishment News-As-Entertainment Industry and the shoot ’em up Wild Wild Web feed us all so readily. Today, we seem to once again be smack in the middle of another media cycle where clever framing words are diluting the real issues of debate, with “tax cuts for the rich” becoming an increasingly common tag-line online, on the air and in print. When media figures and politicians frame the complex issues surrounding the expiring (so-called) “Bush-era tax cuts” simply as a matter of whether one is for or against “tax cuts for the rich,” then they’re subtly steering people in a certain policy direction: “Of course! It’s wrong to cut the taxes of corporate fat cats, bloated political plutocrats, and capitalist greed-heads! Let’s stick it to them instead, because they can afford to pay!”

But that’s not really what’s happening here.

Some history: the” tax cuts for the rich,” as well as the tax cuts for everybody else, actually took place in 2001 (with the passage of the Economic Growth and Tax Relief Reconciliation Act, EGTRRA) and in 2003 (with the Jobs and Growth Tax Relief Reconciliation Act , or JGTRRA). EGTRRA was passed in the summer of 2001, in an effort to put annual government surpluses back into the pockets of the citizens who had paid them, as opposed to sitting on the surpluses for the proverbial rainy day. History quickly demonstrated that the latter approach would probably have been the wiser (though less popular) one, as the rainiest of all rainy days (September 11, 2001) came soon thereafter. The aftermath of that terrible dark day ultimately led to massive global financial crashes and multiple wars, which quickly and significantly over-burdened Federal revenue streams, contributing to growing deficit and debt. JGTRRA, in its turn, was in response to those post-September 11 economic doldrums, providing a relief of tax burdens that were designed to stimulate economic growth.

Again, you can argue whether that was wise fiscal policy or not, but the fact of the matter is this: these two Acts were signed into law seven and nine years ago, with diabolical expiration dates that put the onus for future tax increases smack into the middle of the likely-next President’s term, which is where we stand today; with no explicit Federal action, the Acts’ sunset provisions kick in, and the tax laws return to where they were before the Acts were passed. But up until now, we have all been personal fiscal beneficiaries of those tax cuts for nearly a decade, if we have earned wages during that time. So the core tax policy at stake with regard to EGTRRA and JGTRRA’s looming expiration date has but three possible outcomes:

Let the terms of the Acts expire for everybody, so that everybody experiences a tax increase next year over what they’ve been paying for seven years.

Let the terms of the Acts expire for nobody, so that nobody experiences a tax increase next year over what they’ve been paying for seven years.

Let the terms of the Acts expire only for those above a certain household income (say $250,000), so that only households making more than that threshold see a tax increase next year over what they’ve been paying for seven years.

So where are the “tax cuts for the rich”? It looks instead like what we’re talking about here is either tax increases for the rich, or tax increases for everybody, or tax increases for nobody. The double negative associated with “not canceling the expiring tax cuts” (e.g. do we or do we not minus the minus tax rate?) is leading this argument to be framed in terms of the wealthy getting some new break on the backs of the middle class. But in reality, the best break that anybody gets out of this deal is that their taxes won’t increase. It’s not like we get to go back in time to 2001 and 2003, press the “re-do” button, and eliminate the personal financial benefits that every wage-earner in the United States received over the past decade from these tax cuts, even if those personal financial benefits led us, collectively, to what some see as the brink of economic ruin on a macro basis.

And so this is how the issue should be framed in the media and by our elected officials: “Do we or do we not increase taxes over where they stand today, for some or for all of our citizens, in a time of catastrophic National debt, high joblessness, and stagnant economic prospects?” If you place the highest priority on alleviating debt, then you’d probably conclude that the right thing to do is to “increase the taxes on everybody.” If you place the highest priority on stimulating a stagnant economy, then you’d probably say the right thing to do is the “increase the taxes on nobody.” The thing is, you can’t have it both ways, and couching the debate for political or commercial reasons as “tax cuts for the rich” is simply cynical sloganeering designed to curry votes and viewership, not to fix anything from an economic standpoint.

We’d be in a better place as a Nation, politically, socially, and economically, if we didn’t let such cynical sloganeering frame our most pressing arguments.

Interestingly enough, as our federal tax burden decreased following the passages of the aforesaid Acts, our state and local tax burdens increased proportionally. But I take great exception with your insidious attempt to instill some sense of responsible citizenship into this discussion. This is America! Dance with the stars!

Oh, I make no claims to being a tax expert . . . I make claims to being more of a media manipulation and do the research expert. I’ve been scratching my head for the past few weeks trying to figure out why “tax cuts for the rich” were being discussed . . . and finally decided to do my homework to confirm that the phrase was being used erroneously. Hence this piece.

I agree with you that the complexity of the tax code does provide more opportunities for the wealthy to game the system, so while their marginal rates at the higher end of their income are higher, they may have ample opportunities to deduct away some sizable chunk of their higher income through creative accounting, that generally requires expensive accountants, who blue-collar/middle-class workers may not be able to engage . . . but it’s impossible to have a conversation about that if all we hear is “TAX CUTS FOR THE RICH!”

I know we’re low among developed nations in tax rates, too . . . I hope that the take-out of the article above wasn’t me saying “Don’t increase taxes.” It wasn’t. I’m on record as not being opposed to tax rate increases. I’ve lived in a low tax State (Idaho) and we had crap services. You get what you pay for, to some extent, even from the government.

I think you can make an argument for framing the terminology as ‘tax cuts for the rich’. This temporary Act expires, and if it’s not renewed or extended, than the ‘tax cuts’ will expire. Technically, since the ‘cuts’ (which they were at the time) were only temporary, if this legislation is renewed, we’ll have new ‘cuts’.

And, to be cynical, doesn’t the other side of the divide simply label not extending the Act ‘tax increases’? Historically speaking, far as I know (Krugman, back me up here), the actual taxes the wealthy pay are lower than they’ve been in decades if not a century. Which means pre-dating the progressive era. So in essence, if you ever cut taxes (even temporarily), you’d better not raise them, or else they’ll be labeled as ‘tax increases’. Which means political suicide in this day and age. Or at least so everyone says. Which in effect means taxes on the wealthy keep going further down, because you can only lower them, not raise them.

In addition, though I’m obviously also not a tax expert, the most infuriating part of this Act is the tax cuts it grants to the rich that most people never hear about. I speak here of the long term Capital Gains tax. I have no idea how much this is worth or how much the rich benefit, but it seems to be fiendishly low for the wealthiest Americans, who pay the same exact rate as everyone other than those in the lowest two income brackets (who most likely don’t have a single long term asset anyway).

This is NOT income. This is money made for sitting on something like a stock, a piece of real estate, or any of those arcane financial instruments that sunk the system and through a combination of luck, skill, and knowledge (and let’s not be naive and say knowledge can’t all too often be equated with ‘insider trading); and possibly doing no actual labor whatsoever. Maybe you call your broker or financial advisor once in a while.

Finally, I cannot overemphasize how opposed I am to keeping tax rates at their current levels for households earning $100,000 and up, regardless of how you frame it. People who still have income, especially this level of income, are NOT the ones truly suffering from this economy. The ones that really suffer are those that rely on Government services to, to be blunt, SURVIVE. And if you allow the levels of taxes that we’ve had for the past ten years (with the corresponding increases in borrowing to pay for even reduced services for those most in need), where’s the money going to come from?

I don’t know how much low taxes for the wealthy really improve the economy, and frankly, unless the order of magnitude is one which will allow everyone on unemployment, everyone on welfare, and everyone that relies on some kind of social security or disability to, to paraphrase Ronald Reagan, ‘buy two yachts’, I don’t give a damn.

S.: As noted above, I don’t have a philosophical problem with increasing taxes for high earners . . . I just hate when the debate is boiled down to a class war mantra like “tax cuts for the rich,” just as much as I hated “Ground Zero Mosque” as an attempt at argument-busting. As you and David note: these are complex issues. It’s bad enough when the electorate chooses to be ignorant or outright dumb about their positions on such issues, because newsy-entertainers like Jon Stewart or Glenn Beck (chose your ideology) feed them bite sized messages that they can digest and then spit up later . . . but what’s REALLY dismaying is when our elected officials chose to perpetuate such stupidity as well. We can’t have conversations about meaningful matters like capital gains taxes, because we’re stuck in a rut of “tax cuts for the rich: yes or no?” That’s politics as Twitter fodder, and as you rightly note, there are people’s lives at stake in the outcomes of these decisions . . . which can’t be framed, much less addressed, in 140 character soundbites . . .

And in re the language of “cuts” vs. “increases” . . . yeah, it is political suicide to talk about tax increases anymore . . . but that’s the reality of what happens come January 1 if EGTRRA and JGTRRA aren’t extended: all earners will pay more than they pay now, which is an increase. Yes, the 2001 and 2003 cuts were cynically couched as “temporary,” with expiration dates timed to blow up right in the middle of the likely next Democratic presidency . . . but to me, that’s like factoring in sunk costs into a future cost benefit analysis: they have no currency or standing, other than to drag the Bush administration’s name into the debate again, because that makes it easier for the current administration to point fingers elsewhere, rather than dealing with the issues at hand. I haven’t been setting aside some portion of my reduced taxes for the past decade because they were temporary earnings . . . and I doubt many other people have either . . .

This article wasn’t intended to take a position one way or the other on whether EGTRRA and JGTRRA should be extended. It was just to ask that the question be framed accurately in the public domain.

We over here in New Zealand have had an interesting event, in the sense that we have got GST (Which is a goods and service tax) increased up an extra 3% from what it was being (12 %) thus making it now 15% for Goods and Service tax. Then on top of that we got a tax decrease depending on your earnings, those on 30,000 and under have got an extra $6.00 in there pocket a week and those on a highter income depending on there income scale (which we have three of) get more, those on $50,000 and up get and extra $20.00 per week in the hand, those on $100.000 and above get an EXtra $50.00 per week.

So to me being on the $30.000 and under the extra $6.00 per week still isn’t going to cut it. hence I think the saying the rich get richer and the poor get poorer ( eg tax cuts for the rich) .

This was the Goverment pretending to soften the GST increase for the lower income earners as no-one was told the deductions they would be recieving until the bill was passed in Paliment.